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by David W. Moore
GALLUP NEWS SERVICE
PRINCETON, NJ -- A new Gallup Poll shows that just
over half of Americans have at least one credit card on which
they do not pay off the full amount due each month, thus essentially
using it for a short-term loan. Another 29% say they have at least
one card, but say they always pay the full amount they owe each
month. That leaves about one in five Americans, 21%, who say they
don't have any credit cards, including those issued by department
stores and banks. The average outstanding balance -- the amount
that credit card owners say they will not pay off this month --
is $3,815 among credit card holders, which translates into $2,947
among all Americans (including those who say they have no cards).
The average debt as a percentage of household income is 8.0%,
though it is in double digits for people earning less than $40,000
a year.
These are some of the findings from Gallup's annual
economic and financial survey, conducted April 5-8.
The poll shows that among Americans who have credit
cards, the average number they own is 3.6, about the same as what
Gallup measured in April 2001 and April 2002.
Whether or not someone has a credit card is highly
dependent on income. Half of the people in households with annual
incomes of less than $20,000 have no cards, with that percentage
declining as income increases.
Not surprisingly, among people who have cards,
in general the higher their household income, the higher their
credit card debt. There are two exceptions -- people in the $40,000-to-$50,000
range and those in the $100,000-or-more range.
Although the absolute amount of the debt increases
with income, the debt as a percentage of household income actually
declines from double digits to single digits among people earning
more than $40,000 a year. The overall percentage among credit
card holders is 8.0%, but it is over 10% among people earning
less than $40,000 a year, and much smaller among people with higher
incomes.
Worried About Making Minimum Payments on Credit
Card Debt
Overall, about 17% of Americans are either very
or moderately worried about not being able to make the minimum
payments on their credit cards. Another 22% say they are not too
worried, and 46% say they are not worried at all.
Worry is clearly related to how much credit card
debt people have. The average debt of those with the most worry
is more than $8,000, compared with about $4,700 among people who
are not too worried, and just $2,400 among people who are not
worried at all.
More telling is that the people who are very or
moderately worried have debt that represents more than one-fifth
of their yearly incomes.
Typically, the higher the amount owed, the higher
the interest rates people are paying to the credit card companies.
Thus, for people with credit card debt representing more than
one-fifth of their annual incomes, the cost of carrying the debt
is quite high. It is understandable why they are worried.
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